U.S. Treasury yields plunge after Fed adopts strong dovish stance; eyes on initial jobless claims

The U.S. Treasury yields plunged during Thursday’s afternoon session, after the Federal Reserve kept interest rates unchanged at its monetary policy meeting held late yesterday, while striking a dovish tone, indicating further rate cuts this year.

Investors will now also be focussing on the country’s weekly initial jobless claims and 5-year TIPS auction, both scheduled for today at 12:30GMT and 17:00GMT respectively.

The yield on the benchmark 10-year Treasury yield slipped 1 basis point to 2.016 percent, the super-long 30-year bond yields edged 1/2 basis point lower to 2.534 percent while the yield on the short-term 2-year slumped 4-1/2 basis points to 1.722 percent by 11:20GMT.

At this week’s two-day policy meeting, which concluded late yesterday, the FOMC adopted a more dovish tone compared to that in the prior meeting, consistent with market expectations for lower interest rates in the coming months, Eurobank Economic Analysis & Financial Markets Research reported.

USTs gained sharply with 10-year yields testing levels below 2.0 percent for the first time since November 2016, while in FX markets, the USD came under pressure across the board, the report added.

Meanwhile, the S&P 500 Futures traded 0.82 percent higher at 2,957.62 by 11:25GMT, while at 11:00GMT, the FxWirePro's Hourly Dollar Strength Index remained highly bearish at -107.09 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex